Market Snapshot
The industrial sector in Washington and Iron Counties remains the standout performer of 2025.
According to NAI Excel’s Midyear Market Report, the average lease rate has risen to $10.80 NNN, up slightly from $10.60 NNN at the end of 2024.
Vacancy reached 7.8%, but when excluding two large temporary vacancies (the 215,000 SF Genpack East plant and 58,000 SF in Nautilus I), the functional vacancy is closer to 1.0%.
This highlights an extremely tight small- to mid-bay market where logistics, trades, and manufacturing users continue to expand.
Emerging Submarkets
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Cedar City (Highway 56 Corridor): Multiple parks under development with grading underway. Excellent land availability and workforce access make this a cost-effective hub.
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St. George West Side: Limited infill parcels are commanding premiums as demand for yard and truck access rises.
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Washington City / Southern Parkway: Emerging for mid-size distribution and contractor warehouses with convenient I-15 access.
Investment Outlook
With CAP rates between 6.0–7.5%, industrial assets offer both stability and upside. Institutional investors are re-entering Southern Utah, particularly seeking newer construction with long-term leases.
Opportunities include:
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Acquiring stabilized small-bay parks with 3–5 year leases.
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Targeting sale-leaseback transactions with owner-operators seeking liquidity.
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Developing build-to-suit projects for regional logistics and trades tenants.
“Industrial remains the heartbeat of Southern Utah CRE—functionality, clear height, and location drive returns.”
Underwriting Tips
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Verify Utility Specs: Tenants increasingly demand 3-phase power and fiber connectivity.
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Stress-Test Rents: Rising construction costs mean replacement rents may support higher values.
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Plan for TI Costs: Even light manufacturing users often require HVAC, water lines, and upgraded restrooms.
CTA:
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